U.S. Rep. Katie Porter (D-CA) and U.S. Sen. Elizabeth Warren (D-MA) are among a group of lawmakers sponsoring a bill that would repeal a provision in a 2018 bill that they say contributed to the collapse of Silicon Valley Bank (SVB) and Signature Bank.
Specifically, their bill, the Secure Viable Banking (SVB) Act, would repeal Title IV of the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018. Title IV of the Economic Growth, Regulatory Relief, and Consumer Protection Act raised the asset threshold at which a bank is considered and regulated as a “systemically important financial institution” to $250 billion. This exempted Silicon Valley Bank and other mid-sized banks from regular stress testing and enhanced liquidity, risk management, and resolution plan, or “living will,” requirements.
This new legislation would repeal those 2018 regulatory rollbacks.
“Americans deserve to know their money is safe when they deposit it in the bank,” Porter said. “In 2018, politicians rolled back critical regulations protecting Americans’ deposits—ignoring warnings from financial experts in favor of Wall Street special interests. I’m calling on Congress to restore common-sense guardrails that keep corporate greed in check and restore confidence in our financial system.”
The bill is cosponsored by 50 lawmakers from both houses of Congress. It is also backed by Americans for Financial Reform, California Reinvestment Coalition, Consumer Action, Consumer Federation of America, Main Street Alliance, and Public Citizen.
“In 2018, I rang the alarm bell about what would happen if Congress rolled back critical Dodd-Frank protections: banks would load up on risk to boost their profits and collapse, threatening our entire economy – and that is precisely what happened,” Warren said. “President Biden called on Congress to strengthen the rules for banks, and I’m proposing legislation to do just that by repealing the core of Trump’s bank law.”